Interest rate up another 0.5%
The Reserve Bank (RBA) board has lifted interest rates by 0.5%
The latest rate rise comes on top of the 0.5% rate rises announced by the RBA in both June and July and is consistent with the expectations of a majority of economists.
The latest rise brings the policy rate to 1.85%.
The commentary attaching to the RBA decision stated that the board places a high priority on the return of inflation to the 2-3% range over time, while keeping the economy on an even keel.
The RBA said inflation in Australia is at the highest level since the early 1990s and that in headline terms, inflation was 6.1% over the year to the June quarter, while in underlying terms it was 4.9%.
It said inflation. is expected to peak later this year and decline back to 2-3% range.
“The expected moderation in inflation reflects the ongoing resolution of global supply-side problems, the stabilisation of commodity prices and the impact of rising interest rates.
Honestly, we should see a class action for all those borrowing just last year and earlier this year, when the bank interest rate buffer was only 2.5%, and only changed to 3% in October 21 and they made their borrowing decision based on the guidance from the RBA. Just a joke really when the inflation issue is only partially demand but far worse on the supply side pushing up prices. How does interest rate hikes help supply?
You think we need a class action because the nanny state wasn’t nannying enough? Big changes to interest rates and property values are always a possibility in any property purchase. No-one forced people to buy. Home ownership is neither a right nor a necessity. Investment properties are rarely appropriate for most people.
Rather than blaming government and regulators for insufficient mollycoddling, we should be blaming government for causing an unsustainable property bubble in the first place, through overly generous incentives and concessions. Uncapped primary residence CGT exemption, discount CGT rate on investment property, negative gearing, uncapped age pension means test exemption for the primary residence, the SMSF loophole that allows super to be geared up to buy property, and every single “first home buyer assistance” handout, have all incentivised Australians to spend far too much money on property. These incentives need to be unwound.
Honestly, a class action????? I’m fed up with people assuming guidance from the RBA was some sort of promise of eternally low interest rates. Get real folks. If you decide to get up to your eyeballs in debt that you really can’t afford that’s your decision. If you take out a mortgage for 25 to 30 years when the cash rate is 0.1% what direction do you think interest rates will take? Maybe a class action against stupidity.